View full sizeExpress-Times File PhotoDeveloper Abraham Atiyeh over the summer put up signs and a tent anticipating approvals that never came foe a psychiatric hospital and drug rehabilitation center in Bethlehem.

Plans rejected by Bethlehem officials for a substance-abuse and psychiatric facility are headed back for city review.

A hospital would fit the city's zoning for the site and it was nearly identical to previously approved plans for an assisted living center, the company argued in its lawsuit. At the meeting, the commissioners refused to say why they turned down the proposal, according to the suit.

In response to the lawsuit, the city argued Bethlehem Manor Village was shoehorning the term hospital onto the project. In reality, it is better defined as a rehabilitation facility, which is not allowed on the property under zoning law, city attorneys argued. A group of local residents intervened in the lawsuit on the city's behalf, calling the site inappropriate for the use because it would create safety concerns for the nearby residential neighborhood. The site is within walking distance of homes, Bethlehem Christian School, Bethlehem Catholic High School and Heimple Park.

In a ruling issued late Friday afternoon, Judge Edward Smith found commissioners lacked the authority to turn down the plans. The commissioners cited zoning law, which lies in the realm of the zoning hearing board. Smith ordered the zoning hearing board make a decision on the proposal then send it back to the planning commissioners. Smith did not weigh in on whether the project was a rehabilitation center or a hospital.

Atiyeh this afternoon vented his frustration over the decision. Atiyeh said that even though Smith found the commission erred in denying his project, the project still faces significant hurdles. Zoning hearing board members are appointed by Mayor John Callahan with city council approval, and he doubted the board members would allow the project to continue.

"I'm happy halfway. They never should have done this," he said. "The judge gave me a half-win."

Atiyeh said he plans on filing a multimillion-dollar lawsuit against the city because the planning commission cost him a year of profits by erring in its decision. By regularly turning down his projects, the city is harassing and discriminating against him, he said.

Calls for comment to Steven Goudsouzian, who represents the four intervening Bethlehem residents, and Jennifer Doran, the attorney representing the city, were not immediately returned.